The objective of this study is to develop a causal model of the system of nursing home utilization that would take into account not only relevant population characteristics and medical resources and organization, but also community resources and alternatives to institutionalization. Using data from 102 Illinois counties, the causal model would be analyzed with path analysis techniques to trace direct and indirect effects of variables on subsequent variables and finally on nursing home use. It is anticipated that path analysis of the causal model will yield appreciable information about the direct and indirect influence and importance of population characteristics, alternatives to institutional long term care, support services and medical care delivery on the admissions, length of stay and patient days in nursing homes. The rising costs of institutional care, the increasing role of government in funding, planning and regulating long term care facilities, the increasing number of elderly using long term facilities, and the growing recognition that a wide range of non-institutional alternatives is possible have increased the need to understand the system of long term care.